Category

Accounting

Nov 14
0

New FASB Rules Help Nonprofits Tell Their Stories

By | Accounting, FASB, Nonprofit | No Comments

Can you really tell stories with numbers? The FASB thinks so. The new Accounting Standards Update No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities takes effect for annual financial statements issued for fiscal years beginning after Dec. 15, 2017, and for interim periods within fiscal years beginning after Dec. 15, 2018. The goal is to help nonprofits clearly state, through their financial statements, their ‘story’ so that donors and others can make better-informed decisions.

Welter Consulting helps nonprofits gather and share their financial ‘stories’ through smart money management and software that supports better financial management. As you learn more about FASB Topic 958, consider upgrading your software to provide you with the updated and detailed accounting information that will be required moving forward.

FASB Topic 958

Much has been written in the financial press about FASB Topic 958, or the new Accounting Standards Update. It is the first such update in 20 years and proposes several major changes for nonprofit accounting methods.

These changes include:

* Two net asset classes instead of three.

* Changes in how underwater amounts of donor-restricted funds are reported.

* Requirements to how nonprofits report liquidity risks.

* Reporting expenses by function and nature, as well as an analysis of expenses by both function and nature.

Why all the changes? The FASB recognizes that numbers tell an important story. The public has a right to obtain a clear, concise, and detailed summary of that story through a nonprofit’s financial statements.

Although much of the information was included by nonprofits, the new requirements hope to force nonprofits to accurately, clearly, and completely disclose how they are tracking and using funds.

Donors Require Fiscal Transparency

Donors today are just as philanthropic-minded as past generations. They are, however, deeply concerned that their donations are used for the purposes for which they are given. They want to know that their money is going to fund specific activities. Although most donors do recognize that some money must be spent on operational expenses, most want to see their donation going for the good of the cause or to fulfill the organization’s mission.

You can help donors understand your financial reports in many ways:

* Providing both required disclosure as well as additional, simplified language for the public to explain the numbers on your reports.

* Campaigns to increase awareness for your activities and initiatives.

* Donor outreach and communications, including social media and newsletters that shares how funds are used.

The greater the transparency around how your funds are used, the greater the trust between donors and organizations. The FASB requirement is important to note, but of even greater importance is winning and keeping the public’s trust. Smart nonprofits are already taking steps to ensure that this happens, along with steps to comply with the new FASB regulations.

At Welter Consulting, we are committed to helping you find affordable, useful technology, and to learning how to use that technology to its fullest capacity. We work exclusively with nonprofits and government agencies to help them find and use technology solutions. For more information, please contact us or call 206-605-3113.

Oct 26
0

Bringing Fundraising and Finance Together with Nonprofit Accounting Software

By | Accounting, Fundraising, Nonprofit | No Comments

Working Together Can be a Challenge

 

You play for the same team, but somehow you feel like cross town rivals.  This sometimes happens between the fundraising and finance departments of a nonprofit. You sit across from each other at meetings, but it doesn’t feel like you are on the same team.  In reality, you are all working towards the same common goal. Accounting software for nonprofits can help merge these two departments onto the same team. It’s easier to work together when you understand the roles of each department.

 

It’s Not Easy to Walk in Someone Else’s Shoes

 

When thinking about your finance and fundraising departments remember the old saying, “You don’t know what it’s like to be someone else unless you’ve walked a mile in their shoes.” When it comes to fundraising and finance, there are things that each department wished the other knew about their work and concerns.

 

Fundraising wishes that finance could…

  • Understand the challenges and process of fundraising;
  • Accept that you have to spend money to make money (or get donations);
  • Help us maintain good donor relations;
  • Offer us some flexibility – things aren’t always black and white in our world.
  • Respect that fundraising isn’t easy.

 

And finance wishes that the fundraising team could…

  • Understand the fact that finance’s job is complex and time-consuming;
  • Accept help from experts in finance.
  • Help us do our jobs better by providing us with information we need.
  • Offer to sit with us to learn some basic accounting practices.
  • Respect deadlines.

 

It’s often easier to come to consensus when you understand and respect one another’s positions in a situation. Knowing what the other ‘team’ wants can help you step closer to a compromise, and to support each other’s vital roles in an organization. One way to share information is through accounting software for nonprofits, which can help both teams step closer to one another through shared information.

 

Different Departments, Similar Challenges

 

Although finance and fundraising reflect different departments with varying needs, both seem to experience similar challenges when it comes to data and information. Ways in which both departments can help each other overcome their shared challenges include:

 

  • Collaborate on budgets and tracking
  • Improve reports and reconciliation of financial information
  • Jointly plan and set goals
  • Establish frequent, timely communications
  • Identify ideal processes and procedures
  • Integrate fundraising and accounting software

 

Software for nonprofits is a great tool that can help both departments communicate, collaborate, and plan together.  Various software packages including Abila MIP and others can work independently or together to provide data sharing among teams, timely updates and more. Cloud-based solutions ability to be accessed anywhere that there is a web connection makes it easier for fundraisers who travel to visit donors.  They can see and update accounts from the road, which in turn, will help the finance department do their jobs better.

 

The right accounting software for nonprofits won’t solve all of your internal struggles, but it can help to get fundraising and finance on the same team.  This will be a win win for all the players involved.

 

Contact Us

 

Welter Consulting makes choosing the right accounting for nonprofit software easier.   At Welter Consulting we are committed to finding you the most affordable technology, the most powerful solution, and providing expert support. We are dedicated to assist you in achieving your mission by leveraging technology and superior reporting. If you’re ready to cross the bridge to empowering technology, effective nonprofit solutions, and superior technology – let’s begin! We would love to talk to you about your specific needs.  Contact us today or call 206-605-3113.

Oct 12
0

Findings from the Northwest Nonprofit Capacity Report

By | Accounting, Nonprofit | No Comments

The Northwest Nonprofit Capacity report for 2016 recently released points to resiliency and advocacy throughout the northwest, with a healthy and growing nonprofit base. The full report may be accessed online for those interested in the comprehensive picture of nonprofit activity in our region.

 

Capacity-building, both for continuing existing work and creating growth for the future, remained a top concern for all nonprofits regardless of their mission. Among the areas of greatest concern are:

1. Human resources: All human resources activities were of concern, but the need for staff and expanded staffing was at the top of the list. Specific        skills such as grant writing, fundraising, technology skills and other skills may be difficult to find for specific nonprofits. Maintaining and managing      human resources for an organization remains challenging as well.

2. Facilities: Many nonprofit organizations hoped to improve their facilities and equipment. Capital campaigns to build new facilities or upgrade             existing ones are a shared concern. Improving and updating necessary equipment also ranks high on the capacity-building needs.

3. Fundraising: There’s probably no nonprofit in the country that doesn’t wish it had better fundraising, but fundraising ranked third on the list of        concerns for northwestern nonprofits.

4. Communications: Greater community outreach and awareness is a shared desire among nonprofits responding to the survey.

5. Strategy and leadership: Without exception, nearly all felt they needed to become more proficient at the business side of running a nonprofit.          This includes improving leadership, strategic decision making, and other skills.

Five nonprofit, state-based associations participated in the survey. These included Alaska, Washington, Oregon, Montana and Idaho. Although serving a diverse array of needs, they all reflect a consensus around improved business practices, communications and community outreach, and additional resources to fulfill their mission.

 

Nonprofit Accounting: Gaps

One surprising result of the survey is that only 77% of nonprofits in the northwest have a written annual budget. About the same number have such a budget approved by a board, and use it. Slightly fewer agree that their budget is ‘effective.’

 

Budgeting is critical for nonprofits to remain healthy and viable. Understanding the nuances of your financial situation, apportioning funds accordingly, and diversifying income streams are all part of running a sound nonprofit.

 

Other key findings related to accounting show a significant lack of written fundraising plans. Only about 43% of respondents have a written plan, and approximately 33% find such a plan effective The remaining majority of nonprofits either do not have a plan at all or have a verbal plan agreed upon by their members.

 

Such haphazard fundraising efforts may lead to uneven income. Although grants, membership fees, and other funding may provide a solid foundation, without additional fundraising activities you run the risk of critical shortfalls should any of these routes fail to be productive in a given year. Diversifying fundraising efforts is just as smart as diversifying personal investments.

Perhaps most troubling of all is the lack of business planning among northwest nonprofits. Fewer than 25% have a written business plan. The old adage, “Those who fail to plan, plan to fail” may be true. A business plan also provides a solid base upon which a nonprofit can build and grow. Without it, your organization may suffer from mission or scope creep and unproductive activities.

 

Hopeful Signs, Room for Improvement

The report shows both many hopeful signs as well as room for improvement. Business strategies, financial management, and other quantitative disciplines must improve for nonprofits in the northwest to remain healthy.

 

The many hopeful signs, such as a strong commitment to change and growth, point to a positive outcome despite these limitations.

 

Welter Consulting

Welter Consulting offers financial reporting, compliance, and software to help nonprofits with their accounting needs. We focus solely on nonprofits, bridging the information gap between nonprofits and business disciplines. We are passionate about helping nonprofits success. For more information, visit us online or call 206-605-3113.

 

 

Jul 10
0

New Webinar Added to the Enrichment Series!

By | Accounting, Nonprofit, Nonprofit Enrichment Series, Uncategorized, Unclaimed Property, Webinar | No Comments

Unclaimed Property Requirements and Solutions

Thursday, Aug 11, 2016 9:00 AM – 10:00 AM PDT
Click here to register

Ensuring compliance with unclaimed property state requirements and making the process less painful and cumbersome is key to this free webinar. Learn what constitutes “unclaimed property”, and the major changes to the Unclaimed Property Law that impacts all holders of unclaimed property. Receive an overview of the unclaimed property reporting process and some of the various techniques that auditors use to uncover unclaimed property. Understand the various types of property that may be claimed by the states as unclaimed property and learn various possible structuring techniques to reduce unclaimed property liabilities.